The clock is ticking for USA....

[sunny001]

You should print enough money so that it keeps up with inflation, but printing money to pay off DEBT IS BAD, every government that tried this has failed. Zimbabwe just tried to solve their debt problems by printing out money and it failed spectacularly



It does count, what do you think will happen when these American people wake up and find that the money that they put into the banks are worthless? that their social security money is gone? that their USA bonds are worthless? all because the government blew their money away? A Greece situation is going to happen people will be running through the streets throwing malatovs.

The trade deficit is bad because it shows that the USA is UNCOMPETITIVE they are producing goods and services that NO COUNTRY wants. As proof compare the USA in the 1950's to the USA of 2010. The USA used to have a car industry but it failed due to being uncompetitive now it belongs to Japan and Germany, The USA used to have a shipbuilding industry now today the ship building is done by South korea. The USA used to have an manufacturing industry, now everything is made in China. The USA used to have an electronics industry now it is owned by Japan. The trade deficit is a sign that the USA's industries are dying/going bankrupt en masse. Japan and Germany have high consumption but they are in good shape because they have good and services that are in high demand from other countries.





Take a look at modern cities like New York and compare them to modern cities of Japan, China, France etc....

Electrical lines are still being held up on wooden poles rather than underground. Their are no high speed rail tracks. The roads and sidewalks are dirty and falling apart due to poor maintenance.

The USA still doesn't have SMARTGRID TECHNOLOGY so a lot of electricity is being wasted
Smart grid - Wikipedia, the free encyclopedia

USA still doesn't have high speed telecommunications

Map is an insult to most asian and african countries. Come on Asia, you need to be at the top in everything.

 

[gambit]

You seem quite confident that he will be a one-termer.

Who is the leading Republican candidate?

Too early into O's regime to be that confident. We will have to wait to see which party controls the US Congress. Same for who is the most attractive Republican for the party faithfuls. Do not dismiss Palin. The world's opinions of her in particular and of US in general does not matter as much as 'the world' would like to believe. If there is a President Sarah Palin, 'the world' will see as muscular a US as when both Bushes were in power. Take that as a warning...

 

[Chinese-Dragon]

Too early into O's regime to be that confident. We will have to wait to see which party controls the US Congress. Same for who is the most attractive Republican for the party faithfuls. Do not dismiss Palin. The world's opinions of her in particular and of US in general does not matter as much as 'the world' would like to believe. If there is a President Sarah Palin, 'the world' will see as muscular a US as when both Bushes were in power. Take that as a warning...

I'll indeed think about that lol...

 

[TorontoNoctis]

@Chinaowns:

Who says the USA is printing money to pay off debt? It is not paying off its debt at all. And in fact that is a good thing during a global recession since paying off debt during a recession is dumb.

Now you bring up Greece. A year ago you debt fear mongerers were bringing up Iceland. What happened there? That's right, foreign speculation and foreign deposits. Greece's issue is tax evasion and you guessed it, foreign speculation on its currency fueled by too quick integration into the eurozone. In other words, if Greece had kept its currency instead of the Euro it would have avoided the currency speculators. In both cases, foreign interference and foreign factors. It is clear that foreign debt matters, public debt does not.

And even if you think it does, you cannot simply state "USA has a trade deficit" and dismiss all countries with greater debt as a percentage of GDP, countries worse off. Because guess what? Other countries like the UK, France and Israel have a much higher public debt to GDP ratio but also have a trade deficit. Are you predicting the collapse of all these giants along with the USA, or do you just use statistics selectively when it suits you? A trade slurpus/deficit does not prove that you're producing goods nobody wants. It only proves either that your nation is a nation of vast natural resources (like Canada) or a nation of heavy consumers (like the USA). Too bad Chinaowns, debt won't be the killer of the USA

 

[Chinaownseverything]

:

Who says the USA is printing money to pay off debt? It is not paying off its debt at all. And in fact that is a good thing during a global recession since paying off debt during a recession is dumb.

They are printing money to buy bad debt that nobody wants

Bernanke Admits Printing $1.3 Trillion Out OF Thin Air | Open Prison

Fed Chairman Ben Bernanke admitted the central bank created $1.3 trillion out of thin air to buy mortgage backed securities. This shocking admission came from the Joint Economic Committee hearing on Capital Hill last week.

Now you bring up Greece. A year ago you debt fear mongerers were bringing up Iceland. What happened there? That's right, foreign speculation and foreign deposits. Greece's issue is tax evasion and you guessed it, foreign speculation on its currency fueled by too quick integration into the eurozone. In other words, if Greece had kept its currency instead of the Euro it would have avoided the currency speculators. In both cases, foreign interference and foreign factors. It is clear that foreign debt matters, public debt does not.

ICELAND DID GO BANKRUPT, they had to get a bailout from the IMF. This is not going to happen to the USA, because the USA is TOO BIG to BAILOUT.

And even if you think it does, you cannot simply state "USA has a trade deficit" and dismiss all countries with greater debt as a percentage of GDP, countries worse off. Because guess what? Other countries like the UK, France and Israel have a much higher public debt to GDP ratio but also have a trade deficit. Are you predicting the collapse of all these giants along with the USA, or do you just use statistics selectively when it suits you? A trade slurpus/deficit does not prove that you're producing goods nobody wants. It only proves either that your nation is a nation of vast natural resources (like Canada) or a nation of heavy consumers (like the USA). Too bad Chinaowns, debt won't be the killer of the USA

Israel has a surplus, Britain and France both have Tiny trade deficit's.

USA's trade deficit is roughly 12 times larger than Britains. Also large economy is completely unrelated with large trade deficit or surplus.

 

[TorontoNoctis]

Of course Bernanke created 1 trillion out of thin air. It is exactly what Japan did, and it's called quantitative easing. But it has nothing to do with the USA paying off its public debt or its external debt as you claimed, and everything to do with an attempt to inject money into the system during a recession. Also, size of economy does matter. It's called economy of scale, and it's why the USA has a much larger trade deficit than the UK.

Your economics knowledge is near zero. If you were advocating some other economic school or opposing theory that would be fine, but you simply scream "LARGE NUMBERS" and expect people to take you seriously. Oh well, I should have known better than to debate you

P.S. I can't believe you missed the Iceland point entirely. Let me spell it out for you. Iceland went bankrupt because the big Iceland banks had tens of thousands of foreign depositors it couldn't honor. In other words it was killed by foreign debt and not public debt. And if you look at the list of countries by foreign debt you can see that many countries are far higher than the USA, and your examples of Greece and Iceland are tremendously higher. The tipping point appears to be 150% of GDP since that is where Greece is, but for a larger more sophisticated economy it is probably much higher (in fact it has to be or Japan and others would already be in a sovereign debt crisis).

 

[CardSharp]

Of course Bernanke created 1 trillion out of thin air. It is exactly what Japan did, and it's called quantitative easing. But it has nothing to do with the USA paying off its public debt or its external debt as you claimed, and everything to do with an attempt to inject money into the system during a recession. Also, size of economy does matter. It's called economy of scale, and it's why the USA has a much larger trade deficit than the UK.

Not exactly correct.

should be "and everything to do with an attempt to inject money into the system during a credit crisis" not recession.

"It's called economy of scale" - you've misused the phrase here as economy of scale actually has a technical definition. No doubt you've heard it before so that's why you used it.

Economies of scale - Wikipedia, the free encyclopedia

 

[whocares]

haha, yeah that was a funny use of 'economy of scale'.

my personal opinion is that the finance part of capitalism is deeply flawed and in ways we don't completely understand.

money, currency, debt, these are all fragile things indeed. china looks healthier in terms of trade deficit and fiscal deficit than the US, but if the dollar ever underwent a huge collapse or the US defaulted on debt, we'd be in for a global meltdown no economy will survive.

 

[below_freezing]

Let's not over estimate ourselves. China is not even remotely comparable to US militarily. If hypothetically, a war broke out between US and China, we all know who would win it and how easily. So please stop ur chest pumping.

depends on how you define win. if it was that easy, the US would've moved in already, like they did in the past. on the other hand, the disparity between india and china is like the difference between USA and iraq.

 

[CardSharp]

haha, yeah that was a funny use of 'economy of scale'.

my personal opinion is that the finance part of capitalism is deeply flawed and in ways we don't completely understand.

money, currency, debt, these are all fragile things indeed. china looks healthier in terms of trade deficit and fiscal deficit than the US, but if the dollar ever underwent a huge collapse or the US defaulted on debt, we'd be in for a global meltdown no economy will survive.

The problem in my opinion is many of these financial instruments like derivatives, futures etc serve little function and generate no actual wealth. They essentially become places for very rich people to gamble.

Excessive speculation also means that stock prices are worth far more than what the dividend valuation model indicate. They are worth basically what people want them to be worth and this goes through cycles over bearish over pessimism and bullish over optimism. Besides do well financed companies like google really need to capital generated by putting itself on the stock market?

 

[whocares]

The problem in my opinion is many of these financial instruments like derivatives, futures etc serve little function and generate no actual wealth. They essentially become places for very rich people to gamble.

Excessive speculation also means that stock prices are worth far more than what the dividend valuation of stocks indicate.

stock valuations aren't existentially threatening, though credit or currency derivatives might prove to be someday.

a big shock like US debt default or some big country's debt default will introduce discontinuities so big into currency and credit markets that all business activity will get derailed.

something like that won't be pretty at all.

 

[gambit]

Of course Bernanke created 1 trillion out of thin air. It is exactly what Japan did, and it's called quantitative easing. But it has nothing to do with the USA paying off its public debt or its external debt as you claimed, and everything to do with an attempt to inject money into the system during a recession. Also, size of economy does matter. It's called economy of scale, and it's why the USA has a much larger trade deficit than the UK.

Your economics knowledge is near zero. If you were advocating some other economic school or opposing theory that would be fine, but you simply scream "LARGE NUMBERS" and expect people to take you seriously. Oh well, I should have known better than to debate you

Exactly...Screaming "LARGE NUMBERS" is pretty much the only thing these US critics can do regarding their predictions on the supposedly coming US economic collapse and the only understanding they have of economics in general. Do not bother yourself much about their nitpicking your 'economy of scale' usage. Not that difficult to know the context you were trying to explain.

 

[CardSharp]

stock valuations aren't existentially threatening, though credit or currency derivatives might prove to be someday.

a big shock like US debt default or some big country's debt default will introduce discontinuities so big into currency and credit markets that all business activity will get derailed.

something like that won't be pretty at all.

Not at all pretty, but I have a hunch that I'll see it in my lifetime.

My point about stock valuation wasn't really to say it was threatening but rather the pointlessness of such system. The stock market is a zero sum game, for every winner there is also a loser (plus whatever the broker takes out of it). All to what point?

We are building needless complexity into our financial systems and complex system are prone to spectacular failure. Yeah it's going to be a crappy day when it comes. I just hope I have enough assets in the right places on that day.

 

[Chinaownseverything]

Of course Bernanke created 1 trillion out of thin air. It is exactly what Japan did, and it's called quantitative easing. But it has nothing to do with the USA paying off its public debt or its external debt as you claimed, and everything to do with an attempt to inject money into the system during a recession. Also, size of economy does matter. It's called economy of scale, and it's why the USA has a much larger trade deficit than the UK.

Your economics knowledge is near zero. If you were advocating some other economic school or opposing theory that would be fine, but you simply scream "LARGE NUMBERS" and expect people to take you seriously. Oh well, I should have known better than to debate you

P.S. I can't believe you missed the Iceland point entirely. Let me spell it out for you. Iceland went bankrupt because the big Iceland banks had tens of thousands of foreign depositors it couldn't honor. In other words it was killed by foreign debt and not public debt. And if you look at the list of countries by foreign debt you can see that many countries are far higher than the USA, and your examples of Greece and Iceland are tremendously higher. The tipping point appears to be 150% of GDP since that is where Greece is, but for a larger more sophisticated economy it is probably much higher (in fact it has to be or Japan and others would already be in a sovereign debt crisis).

Trade deficit is total export minus total import.

A company that has a large revenue deficit is one that has expenses much higher than revenue.

A large company should have both large expenses and large revenues when these are subtracted from each other they produce a small deficit. Strong but large companies have a small deficit.

The only companies with large deficit's are startup companies and companies on the verge of collapse (General motors)

 

[gambit]

depends on how you define win.

Right...Guess the popular thing to do is to simply redefine, ala 'Baghdad Bob', on what is a 'win'.

if it was that easy, the US would've moved in already, like they did in the past. on the other hand, the disparity between india and china is like the difference between USA and iraq.

No one ever said that winning is 'easy'. The issue is here is the disparity in technology and experience between potential enemies and in both the US is far ahead of China. That disparity is like a club that we hold in check in the event that diplomacy fails. Yes, against China militarily speaking we would take some bloody blows but in the end there is little doubt that the PLA would be defeated. Not easily but defeated nevertheless.